Prabowo's 2027 Budget Faces Investor Scrutiny Amid Falling Approval
Indonesia's President Prabowo Subianto presents his 2027 budget amid falling approval ratings and investor unease over commodity export plans and fiscal discipline.
Indonesian President Prabowo Subianto will unveil his 2027 budget proposals on Friday, a moment economists describe as a critical credibility test for his administration. The announcement comes as his approval ratings slide and investor confidence wavers over the government's economic direction.
Prabowo, who took office in October 2024 after promising faster growth and anti-corruption reforms, has seen his popularity drop by 30 percentage points in eight months to 51 percent, according to a recent poll. The decline is largely attributed to worsening economic conditions and public dissatisfaction with law enforcement.
The president's flagship free meals programme has also faced budget cuts and allegations of mismanagement, adding to the sense of uncertainty surrounding his policy agenda.
Investors are particularly focused on the role of Danantara Sumberdaya Indonesia, a proposed state entity that Prabowo said in May would centralise exports of critical natural resources. Administration officials have since suggested the body may play a supervisory rather than controlling role, but its precise function remains unclear.
"The 2027 budget is clearly one of the most important credibility checkpoints for global investors in recent years," said Irman Faiz, an economist at Bank Danamon. "What makes this moment different is that the market's tolerance for policy uncertainty has grown thinner."
Indonesia's fiscal deficit, which stood at around 2.8 percent of GDP in 2025, is projected to approach the 3 percent constitutional ceiling again this year, adding to concerns about overspending.
Commodities traders will be listening closely for any further details on Danantara's role, according to a palm oil analyst at a global agriculture trading house.
Arya Fernandes, head of politics and social change at the Center for Strategic and International Studies, said Prabowo will need to address doubts over the economy and concerns about the impact of his priority programmes. "Given the current situation, that is certainly no easy task," he added.
Prabowo is scheduled to deliver a morning address marking Independence Day before presenting the budget in the afternoon.